California requires at least 90 days' notice before certain private equity healthcare deals close. Expanded rules effective November 2, 2026, spell out when private equity groups, hedge funds, and management services organizations must file. Whether a practice transaction qualifies depends on the entities involved and the deal's terms. [1][2]
For a practice owner considering a sale or outside investment, that changes what belongs in the first conversation. Alongside price and your future compensation, ask who must file, what information they need, and how the proposed closing schedule accounts for review.
This article is research and reporting, not legal advice. Always consult a California healthcare attorney about your specific transaction.
What Changed on November 2
California already had a healthcare transaction notice system. Assembly Bill 1415 expanded it to additional participants, including private equity groups, hedge funds, management services organizations, newly created acquisition entities, and entities that own, operate, or control providers. The statute took effect January 1, 2026. [3]
November 2 is the effective date of the implementing regulation amendments, approved October 2. Those amendments specify filing obligations, transaction triggers, and information requirements. [1]
The agency receiving the notice is the Office of Health Care Affordability (OHCA). Its review examines how a transaction could affect competition, healthcare costs, and access to care. [4]
An owner comparing options for a California concierge or direct primary care practice should have the actual deal structure reviewed. A membership model alone does not answer the filing question.
A Minority Investment Can Still Matter
A management services organization (MSO) provides management and administrative support to a provider. Under this law, that support includes negotiating provider rates, managing the billing and collections process, or both. [5]
For qualifying entities, one new private equity trigger is an investment resulting in a holding of 10% or more of assets, equity, debt, or liabilities. Another concerns acquisitions carrying specified powers, such as replacing leadership, vetoing decisions, or controlling budgets. The latter trigger can apply below 10%. Entity thresholds and exemptions still matter. [5]
That makes the operating agreement worth discussing alongside the ownership percentage. A physician might retain a majority stake while granting an investor substantial contractual authority. Ask counsel to examine the rights attached to the investment before accepting a description such as “passive partner.”
Our guide to taking a private equity buyer's first call covers the broader business questions. California adds a filing analysis to that preparation.
Does This Apply to a Small Independent Practice?
There is no universal filing requirement for every practice sale. Physician organizations with fewer than 25 physicians are generally excluded from the regulatory definition of a healthcare entity, with a high-cost-outlier exception. A covered healthcare entity transacting with a smaller group may still have to file. [2]
The rules also contain financial and geographic thresholds. These include a $25 million annual-revenue or California-assets threshold, a $10 million threshold in specified counterparty situations, and a route involving designated primary care shortage areas. MSOs have separate qualifying criteria. [2]
Treat those figures as questions for counsel, rather than a do-it-yourself exemption calculator. Review the seller, buyer, management company, affiliates, and rights being transferred together. A single location's revenue may not describe the whole arrangement.
The distinction matters for direct primary care practices evaluating growth partners. Start by identifying the legal entities in the proposal and the services each would provide. Then determine which filing rules, if any, apply.
Why 90 Days Is Not a Guaranteed Closing Date
The notice period is measured before closing. OHCA's initial review clock starts once the required filings are complete, including submissions from all parties required to file. An incomplete submission can delay that start. [5]
After a complete filing, the agency generally has 45 days to notify parties that it will waive a cost and market impact review (CMIR), or 60 days to notify them that it will conduct one, subject to pauses in the clock. A waiver permits closing without waiting out the remaining notice period. A full review adds time, and closing must wait until 60 days after the final report. [5]
For planning purposes, ask your attorney to put the filing timetable beside the proposed exclusivity period and financing deadline. If one expires while review continues, you want the contract to address what happens next.
Also decide who pays for additional legal work and any review costs. An attractive purchase price is easier to evaluate when the expenses and timing assumptions are explicit.
The Filing Can Become Public
OHCA treats submitted information as public unless it receives confidential treatment. Certain documents, including stock purchase agreements, compensation documents, contract rates, and valuation materials, are automatically treated as confidential when properly marked. Other information may require a separate confidentiality request. [4]
Build a communication plan before filing. Decide who will explain the proposed transaction to staff and patients, and what you can accurately say about physician continuity, membership fees, and access.
Our patient guide to what happens when a concierge doctor sells or joins a network provides a useful list of concerns to address. Prepare answers about the experience patients are paying for, including appointment availability and who handles their care when you are away.
Notice Does Not Resolve Who Can Control Care
California's corporate practice of medicine restrictions remain a separate issue. The Medical Board says licensed physicians must retain responsibility for clinical decisions and certain decisions affecting care, including patient volume, clinical hiring, and medical records. Those responsibilities cannot simply be delegated to an unlicensed management company. [6]
Ask counsel to assess both the transaction notice requirements and the proposed ownership and management arrangement. Completing the notice process does not establish that every contract term complies with the rules governing medical practice.
Before signing a letter of intent, bring four questions to your advisers:
Who must file? Identify each potential filer and the basis for any claimed exemption.
Which rights are changing hands? Review equity, debt, board appointments, vetoes, budgets, and management powers.
What happens if review takes longer? Address exclusivity, financing, expenses, and termination rights together.
What will patients experience? Put your expectations for physician continuity, access, and membership terms in writing.
A sale is easier to assess when the purchase price, operating terms, and regulatory timetable are visible together. Resolve those questions before you start making commitments around a closing date.
FAQ
Did California introduce this entire notice system in November 2026?
No. AB 1415 expanded an existing system and took effect January 1, 2026. The implementing regulation amendments took effect November 2. [1][3]
Must every small concierge practice notify OHCA before selling?
No. Filing depends on the entities, applicable thresholds, transaction terms, and exemptions. A small practice's own exclusion does not necessarily eliminate another party's obligation. [2]
Does filing notice let an investor direct medical decisions?
No. California's restrictions on unlicensed control of medical practice apply separately. Review the management agreement with a California healthcare attorney. [6]
Keep your practice information current. Find your listing on NextMD and check that its physicians, location, and care model accurately describe the practice patients can join.
Sources
California Department of Health Care Access and Information. (2026). Laws & Regulations: Cost and Market Impact Review. Approval October 2; effective November 2, 2026. HCAI's CMIR regulation adoption record.
California Office of Health Care Affordability. (2026). Approved Text of the CMIR Emergency Regulations, 22 CCR §§ 97431–97442. See pp. 1–2 for the physician-organization exclusion and pp. 4–8 for filing thresholds and transaction triggers. Approved regulations effective November 2, 2026.
California Office of Health Care Affordability. (2026). AB 1415 Frequently Asked Questions. Questions 1 and 3. AB 1415 effective date and additional noticing entities.
California Office of Health Care Affordability. (2026). MCN & CMIR FAQs. Questions 19–20 on confidentiality and 24 on review criteria. OHCA transaction review and confidentiality guidance.
Jackson, T., Ren, C., Raj, D., and David, M. (October 29, 2026). OHCA Finalizes Regulations Expanding Oversight of PE and MSO Transactions. McDermott Will & Schulte. Analysis of MSO definitions, filing completeness, and review timing.
Medical Board of California. (Accessed November 2, 2026). Information Pertaining to the Practice of Medicine: Corporate Practice of Medicine. Medical Board guidance on physician control and management arrangements.